Navigant Research Blog

My earlier blog on 3D printing showed how the process will influence the building industry. In this blog, I’ll report on significant news from China in this field and describe how 3D printing for the consumer market is quickly evolving, changing the prototyping and product development process.

Earlier this month, the Chinese company WinSun Decoration Design Engineering Co. printed 10 small houses in just 24 hours. This is astonishing, especially given the simple approach and cheap cost of these homes. While most 3D printing uses plastic polymers, the WinSun project used a slurry of construction waste, cement, and industrial waste deposited on a simple wireframe mesh to construct the walls. According to an article in TheArchitect’s Newspaper, each structure cost less than $5,000 in materials. These buildings are more like the prefab wooden frame construction that has gained traction of late than the 3D-printed buildings mentioned in my previous blog that are currently in production (in print?) in Amsterdam.

Regardless of how much manual labor was needed to build the Chinese village, there are two significant implications. First, if these structures can be built at a low cost, with minimal assembly and local and sustainable materials, then the future of local housing in the developing world could change very quickly. Post-disaster housing, long-needed manufacturing facilities, and basic buildings like schools or health clinics could simply be printed with durable materials – and very quickly. Second, both the printed Chinese village and the 3D Print Canal House in Amsterdam could be designed and printed for optimal energy efficiency based on the characteristics of the locale – not just the state or federal building code. While a market for these novel approaches has yet to coalesce, the investments in 3D printing from governments and startups around the world will help that market form.

Printing Made Easy

Creating prototypes is a long-used practice in manufacturing, engineering, and design. The ability to touch and feel a physical 3D object can lend insight into its function and consumer response. As 3D printers are dropping in price and size, the use of the technology for product prototyping has been growing. Makerspaces are popping up in major cities around the United States, providing customers with the tools and equipment to print their computer-aided design (CAD) projects for a fee. Some of these have been funded by local governments and some by local entrepreneurs. Others are being funded by corporations looking to engage university students and local entrepreneurs. Last week, General Electric (GE) launched its FirstBuild center, making 3D printing available to local University of Louisville, Kentucky students and faculty. Students and local entrepreneurs will have access to top-of-the-line 3D printers and CAD software to design and prototype their appliance-related ideas. This approach highlights the importance of easy prototyping, as well as GE’s commitment to innovation in design for the consumer and building markets.

Meanwhile, local 3D printing is becoming more accessible. Taking the approach that it is just a different kind of printing, Staples has jumped into the 3D printing game. While Staples already sells 3D printers and supplies, it recently launched its My Easy 3D service, where customers can upload CAD designs to create their own prototypes. With the opening of these modern print shops, entrepreneurs and designers can quickly and inexpensively prototype their ideas. It will be interesting to see how access to easy prototyping will change design and manufacturing, not just in the built environment, but also in our consumer-oriented economy.

Those of us involved in the cleantech industry have a tendency to roll our eyes and smirk when we hear about the backlash against smart meters or see an inflammatory, anti-utility meme on social media. Health concerns? What about that cell phone attached to your ear? Profits? Well, yes, that’s why the utilities are in business. We’re smug in our superior understanding — and that could very well bite us in the long run.

The public is uninformed when it comes to electric utilities and how they function, and therein lies the problem. How are utilities regulated and how does a rate of return model work? How do different generation fuels affect the price customers pay to keep the lights on? These are not things the average consumer thinks about. But they understand the concept of a monopoly, and they don’t like it. Unlike 100 years ago, when people stood in awe of their new electric lights, customers today grouse at the fact that they can’t just cut the cord when they’re unhappy with their electric utility.

According to an annual poll conducted by Gallup, the electric and gas utility industry had a net -1 public opinion score in August 2013. 38% of respondents had a favorable view of the industry, but 39% had a negative view (23% had a neutral view).

Electric and Gas Utility Industry Public Opinion: 2001-2013

(Source: Gallup Annual Poll on Work and Education, August 2013)

That was up 3 points from 2012, but electric and gas utilities ranked just 18th out of 25 industries, beating only such public villains as oil & gas, the federal government, banking, and healthcare.

The electric utility industry is facing some of the greatest challenges in its history, but poor public perception doesn’t have to be one of them. As the industry evolves, effective consumer education and engagement is critical to keeping those customers as deregulation spreads and alternative energy sources become increasingly affordable. In my next blog, I’ll discuss some of the tools available for effective consumer engagement and also point out ways that utilities can avoid shooting themselves in the foot.

The fundamental goal of a hybrid powertrain is to improve fuel efficiency by recovering kinetic energy from the vehicle as it slows down and storing it to reuse later. Traditional vehicles convert that energy to heat in the brakes and then let it disperse into the atmosphere. Hybrid electric vehicles (HEVs) generate electricity via an electric motor and store it in batteries or ultracapacitors. The resistance of the motor slows the vehicle.

An understanding of how the hybrid powertrain works is helpful for drivers who wish to maximize their efficiency on the road. Being careful not to accelerate too hard and slowing down steadily without using the foundation brakes are techniques that have been used since HEVs first went into production in the late 1990s. As they became more popular, some original equipment manufacturers had to deal with complaints from drivers who didn’t achieve the promised fuel economy. Some of the deficit was due to driving technique – if you hit the brakes hard when driving, then the regeneration cannot take place and energy will not be saved for reuse.

Hills Ahead

The basic hybrid system will deliver more fuel economy benefits to drivers who understand how to get the most out of it. But there are limits. Once the battery is fully charged, no more energy can be stored and the vehicle is then no more efficient than its conventional counterpart. It’s very difficult for a driver to work out how to get around this limitation.

However, Mercedes-Benz has done just that with its latest Intelligent HYBRID operating system, which was introduced in the S-Class in summer 2013 and is now available in the new 2014 C-Class. These cars use data from their navigation systems to look ahead for hills. When the vehicle detects a downhill stretch coming up, it knows that the hill presents a good opportunity to capture energy, so it activates the electric motor to start draining the traction battery. Taking more of the power from the electric drive means that the engine uses less liquid fuel, improving fuel economy.

This advanced technology is a first for the consumer market. Another application that uses the latest digital map data is Audi’s adaptive headlight system, which can anticipate upcoming curves to better illuminate the road ahead without dazzling oncoming vehicles. Continental’s eHorizon system optimizes gear shifting to best handle the upcoming terrain. Mercedes is the first to offer map-based efficiency technology in consumer vehicles.

These innovations will undoubtedly benefit vehicle owners by delivering improved fuel economy in real-world usage. However, the standardized tests used by government agencies to help consumers compare vehicles are unlikely to register an improvement because they do not include going up and down hills and are typically conducted on a chassis dynamometer, or rolling road. Another reason to reevaluate how comparison testing is done.

In its April 4 initial public offering (IPO), cloud-based energy software provider Opower raised about $116 million, resulting in a market cap of approximately $1.2 billion. The successful IPO culminates a 7-year march for Opower, which has built a solid reputation with dozens of utilities that are being driven by regulators to encourage residential customers to use electricity more efficiently.

Opower’s technology analyzes utility meter data and then sends residential customers regular reports showing how their energy use compares to their neighbors. Typically, Opower has delivered residential savings in the 2% to 3.5% range. Last year, the company rolled out a behavioral demand response (DR) program now used by Baltimore utility, Baltimore Gas and Electric (BGE). Despite its growth, Opower is still not profitable. In 2013, it generated nearly $89 million in revenue, up from almost $52 million in 2012, but lost a little more than $14 million, greater than its 2012 loss of $12.3 million.

Still Seeking Profits

Other companies in the same energy management arena as Opower have found traction, if not yet profits. EcoFactor offers a software-as-a-service (SaaS) platform that Nevada utility NV Energy uses to help its residential customers become more energy efficient. Using EcoFactor’s cloud-based platform and smart thermostats, NV Energy customers who participate in DR events have been able to reduce their air conditioning use by up to 12% and whole-house electric consumption by 6% for a full year. EcoFactor also has a significant deal with cable operator Comcast, under which its platform powers a service that discovers the heating and cooling patterns of a home and makes automatic adjustments to a smart thermostat based on occupant temperature settings, real-time weather data, and the house’s thermal characteristics.

Similarly, thermostat maker Energate and networking platform provider Silver Spring Networks were chosen by OGE for its home energy management (HEM) strategy. By deploying Energate’s thermostats and utilizing Silver Spring’s DR capabilities, OGE has successfully launched a service that enables participating residential customers to reduce electricity consumption and save an average of $191 during a summer cooling season.

Slow But Steady

Google energized the HEM space in January 2014 when it announced its acquisition of Nest Labs, maker of the popular, though pricey, learning thermostat. The $3.2 billion deal, now complete, signaled that Google was ready to get back into HEM (Google dabbled in energy management with its PowerMeter project but shut it down in September 2011 when it failed to attract enough users). This move helps validate the HEM market.

Despite the slow adoption of HEM programs, these recent market developments portend at least steady market growth in the near- to mid-term, as noted in Navigant Research’s recent report, Home Energy Management. To gain more insight about this trend, you can view the replay of our webinar, Home Energy Management – New Players, Technology Update, and Market Outlook. To see it, click here.